Judge Lisa K. Sepe-Wiesenfeld, Case Number: 24SMCV02377, Date: 2025-03-12 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 24SMCV02377, Date: 2025-03-12 Tentative Ruling

Defendant National Debt Relief LLC (“Defendant”) moves the Court to reconsider and reverse its December 19, 2024 order denying Defendant National Debt Relief LLC’s Motion to Compel Arbitration of Plaintiff’s Individual PAGA Claims and Stay Representative PAGA Claims and granting Plaintiff’s Ex Parte Application for an Order Dismissing Plaintiff’s Individual Claims against Defendant. Defendant argues that the Second District Court of Appeal decision in Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001 constitutes new persuasive law that directly contradicts the Court’s prior order and requires the Court to reverse its order.

When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.

In the order, the Court denied Defendant’s motion seeking to compel Plaintiff to submit his individual claims under the Labor Code Private Attorneys General Act of 2004 (“PAGA”) alleged in his complaint to binding arbitration in accordance with an Agreement to Employment Arbitration Program, and staying the proceedings regarding Plaintiff’s representative PAGA claim until the arbitration of the individual PAGA claim concludes. The Court found that a valid arbitration agreement existed, but the Court found that Plaintiff had not asserted an “individual PAGA claim” because a plaintiff who asserts a claim under PAGA asserts the claim as proxy and agent of the Labor Workforce Development Agency, not in an individual capacity.

In so ruling, the Court noted that in Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, the United States Supreme Court acknowledged that under California law “there is no individual component to a PAGA action” while also stating that “‘individual’ PAGA claims, which are premised on Labor Code violations actually sustained by the plaintiff,” can be distinguished “from ‘representative’ (or perhaps quasi-representative) PAGA claims arising out of events involving other employees.” (Id. at pp. 648-649, brackets omitted.) In Gavriiloglou v. Prime Healthcare Management, Inc. (2022) 83 Cal.App.5th 595, the Fourth District Court of Appeal rejected the concept of “individual PAGA claims,” stating that “an ‘individual PAGA claim’ is not actually a PAGA claim at all,” i.e., “[i]t would exist even if PAGA had never been enacted,” and “[i]t is what we are calling, more accurately, an individual Labor Code claim.” (Id. at p. 605.) In Adolph v. Uber Technologies (2023) 14 Cal.5th 1104, the California Supreme Court again stated that “[a] PAGA claim for civil penalties is fundamentally a law enforcement action,” and “[t]he government entity on whose behalf the plaintiff files suit is the real party in interest.” (Id. at p. 1117, quotation marks and ellipses omitted.)

Insofar as Defendant argued that “California does not provide for a representative-only PAGA action” (Reply, p. 11, ll. 5-6), the Court found that the cases cited provided that an action under PAGA is a law enforcement action, and under PAGA, an employee acts merely as a proxy and agent for the Labor Workforce Development Agency. (Barrera v. Apple American Group LLC (2023) 95 Cal.App.5th 63, 79.) Further, the Court noted that it “is not bound by the United States Supreme Court’s interpretation of PAGA” (id. at p. 90), particularly when there is California appellate case law to the contrary. The Court also dismissed Plaintiff’s “individual” claims against Defendant.

Defendant asks the Court to reconsider and reverse its prior order based on Leeper v. Shipt, Inc., supra, 107 Cal.App.5th 1001, in which the Second District Court of Appeal held that “any PAGA action necessarily includes both an individual PAGA claim and a representative PAGA claim.” (Id. at p. 1009.) Put simply, Leeper v. Shipt, Inc. and Adolph v. Uber Technologies, supra, 14 Cal.5th 1104, are inconsistent, and this Court can evaluate which lines of cases is persuasive. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456 [when appellate decisions are in conflict, trial court can and must make a choice between the conflicting decisions].) The Court opts to stay with its original line of reasoning, which is supported by Rodriguez v. Packers Sanitation Services Ltd., supra, ___ Cal.Rptr.3d ___ [2025 WL 615064], cited by Plaintiff. In that decision, the Fourth District Court of Appeal acknowledged Leeper v. Shipt, Inc. but found that its logic did not withstand scrutiny because it improperly concluded that just because a PAGA action must include an individual claim does not mean that any action brought under PAGA does contain one, and it was requiring the plaintiff to arbitrate a claim she had not chosen to assert, as she had expressly disavowed bringing any individual claims. (Id. at *6.) The appellate court stated that the trial court should examine the complaint to determine whether the action includes an individual claim. (Ibid.) In this action, Plaintiff has voluntarily dismissed his individual claims, such that the Court finds that arbitration is improper. Accordingly, Defendant National Debt Relief LLC’s Motion to (1) Reconsider or Renew Its Motion to Compel Arbitration of Plaintiff’s Individual PAGA Claim and Stay Action; and (2) Reconsider Plaintiff’s Ex Parte Application to Dismiss His Individual PAGA Claim is DENIED.